SALE VALUE. 141 



(a) The wood is allowed to grow on for a number of years. 



In this case the purchaser would have to rent the 

 soil for a number of years, and he would have to meet 

 certain other expenses. Hence the sale value should 

 be equal to the expectation value. 



(b) The wood is to be cut down at once. In this case the 



sale value would be the price which the cut material 

 realizes in the open market. It is ascertained by 

 determining the volume of the growing stock and 

 multiplying it by the net mean rate per unit of 

 measurement. 



The sale value of very young woods under condition b is 

 generally negative, until the receipts obtained by the sale of the 

 produce cover the cost of harvesting ; from that period it be- 

 comes positive, rising at first slowly, then more rapidly, reach- 

 ing its maximum value far beyond the period at which the mean 

 annual increment culminates, in fact not until the annual in- 

 crease in the value per unit of measurement is no longer suf- 

 ficient to cover the falling off caused by thinning or decay. 

 This period occurs, generally speaking, earlier in the case of 

 light-demanding species, than in the case of shade-bearing 

 species which maintain a full stocking for a longer space of time. 



4. Relation existing between the Expectation and Cost Values of 



the Growing Stock of a Normal Wood. 



Looking at the formula? for the expectation and cost values, 

 it will be observed that the soil rental and annual expenses 

 appear in the negative form in the one, and in the positive 

 form in the other ; again, the thinnings appear positive in the 

 first and negative in the second. It follows that any change 

 in these items affects the two values in opposite directions ; 

 what raises the one value, reduces the other, and vice versa. 

 Nevertheless, the one value can become equal to the other. 

 This is the case, other items remaining the same in both 

 instances, if the calculation is made in either case with the 

 expectation value of the soil. 



